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How to Choose a Warehouse Management System: Buy vs Build Comparison

August 31, 2021
14 min

According to Markets and Markets, the warehouse management system software market was valued at $2.4 bln in 2020 and is predicted to reach over $5 bln by 2025.

What’s more, the warehouse management software market is likely to grow at a CAGR of 16% during the period of 2020–2025.

The core reason of the warehouse management system market growth is the impact of COVID-19 which forced all e-commerce platforms to fully automate their internal business processes and operations.

This happened due to the fact that most people started making online purchases only thus increasing the warehouse management load.

This all means that more and more companies are looking for custom or out-of-the-box warehouse management software and here the question emerges: ‘how to choose a warehouse management system?’

For these reasons, we decided to share the all-inclusive guide on warehouse management software development covering the following aspects:

  • What is warehouse management software
  • Warehouse management system market statistics
  • Top WMS software providers
  • The core types of warehouse management systems
  • Key features of warehouse management system
  • How to choose a warehouse management system: buy vs build.

 

So, let’s get down to business and start with the definition.

What is Warehouse Management System

A warehouse management system is a software solution developed specifically to automate, optimize, and support warehouse operations and processes of a company.

This type of software solution plays an integral role in an enterprise’s supply chain management helping companies to automatically process order fulfillment operations from handling raw materials to shipping final goods.

 

What are the key types of warehouse management software (WMS)?

Many companies are wondering how to choose a warehouse management system tailored to their specific needs.

To answer this question, let’s look through the warehouse management systems list in detail.

 

Standalone Warehouse Management System

This type of software solution refers to the basic WMS functionality without supply chain automation features. Most commonly, standalone solutions are on-premises systems connected with the corporate hardware and network.

Standalone warehouse management systems provide the two core features:

  • Inventory management (barcode scanning, slotting, etc.)
  • Warehouse operations automation (picking, packing, shipping, etc.)

 

The most popular standalone warehouse management software providers are NetSuite WMS, Fishbowl Inventory, 3PL Warehouse Manager, and Softeon.

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Supply Chain Execution Modules

This type of software solution is designed to specifically automate the core supply chain operations like inventory management, sourcing of materials, product cycles along with enhanced communication with suppliers, data-driven risks management, etc.

Oracle, SAP, JDA Software, Infor Global Solutions, and Manhattan Associates are among the leading Supply Chain Modules (SCM) software providers.

 

Integrated ERP Systems

Powerful enterprise resource planning solutions can greatly help companies improve their warehouse management by providing solid supply chain execution and scalability opportunities.

Among the core features, integrated ERP systems provide supply chain planning, accounting, customer relationship management, human resources, and others.

The leading ERP systems include Oracle JD Edwards EnterpriseOne, SAP Business ByDesign, Sage Business Cloud X3, SYSPRO, and Microsoft Dynamics ERP.

 

Cloud-Based Warehouse Management Systems

This type of solution is about using a web centralized computing model as SaaS-based software. The main benefits of using cloud-based warehouse management systems are high scalability, ease of use, low costs, quick deployment, and implementation.

The core disadvantages of warehouse management systems within a SaaS-based model are the limitations provided by a software vendor and lack of specific customizations.

Purchasing a cloud-based warehouse management software means you access predetermined customization opportunities without much power to enhance or increase them.

Ultimately, web warehouse management systems are a great deal for companies with multi-location needs as high flexibility and scalability are perfect to meet these demands.

Softeon, Infor SCM, HighJump, and Manhattan Associates are among the flourishing SaaS warehouse management system software.

 

Warehouse Management Software Types

Warehouse Management Software Types | Ascendix Tech

 

What are the leading WMS software providers

The current warehouse management system market is full of web-based off-the-shelf WMS solutions.

They become a great choice for companies desiring to save much time through a fast and easy setup along with no requirements for lots of customization opportunities.

Now we want to share the top WMS software providers covering their mission, core features, and pricing (if any).

 

#1 NetSuite WMS

netsuite-warehouse-management-system

NetSuite Warehouse Management System

 

NetSuite Warehouse Management System is a web-based product by Oracle designed specifically to help companies streamline and automate warehouse operations from receiving to shipping.

 

Here are the key features of warehouse management system by NetSuite:

  • Inbound logistics through a powerful tailor-made mobile app
  • Order fulfillment with intelligent pick-n-pack strategies
  • Advanced bid management
  • Transparent inventory visibility.

 

What benefits do you get by using NetSuite WMS?

  • Enhanced data processing and management
  • Improved labor productivity and performance
  • Increased customer satisfaction
  • Streamlined space utilization.

 

NetSuite warehouse management system software cost

The company provides an annual subscription license which includes a core web-based centralized platform, number of users, additional, and optional modules. Besides, you will need to pay a fee for an initial platform setup and adjustment.

 

#2 Softeon

Softeon-warehouse-management-system

Softeon warehouse management system

 

Being one of the leading WMS software providers, Softeon provides warehouse management system software tailored to optimizing and automating most supply chain operations from receiving to shipping.

The company offers both a web-based cloud solution and an on-premises deployment system up to your business needs.

 

What are the key features of warehouse management system by Softeon:

  • All-inclusive warehouse management tools
  • Enhanced inventory processing and control features
  • Intelligent cycle counting functionality with powerful support for lot/batch management
  • Automated labor and resource management
  • Advanced truck route planning with predictable algorithms.

 

What are the advantages of using Softeon WMS?

  • Improved labor productivity through digitalized and paperless operations
  • Full-scale warehouse management optimization with intelligent and wave-based order release features
  • Enhanced accuracy of real-time shipping
  • Advanced customer compliance and enriched customer satisfaction from labeling to shipping.

 

Softeon warehouse management system software cost

Softeon provides flexible pricing which depends on the number of users, web-hosting costs and implementation costs, and operational complexity.

That said, a monthly subscription fee per user is from $130 to $180 along with $200,000 to $750,000 implementation costs based on operational complexity.

 

#3 3PL Warehouse Manager

3pl-central-warehouse-management-system

3PL Central warehouse management system

 

3PL Warehouse Manager is among the top WMS software providers offering a cloud-based warehouse management system solution designed by 3PL Central to help operations managers and 3PL owners improve routine day-to-day workflows and revolutionize paper-based operations into powerful, automated, and centralized software.

What are the key features of warehouse management system by 3PL:

  • Advanced hands-free solutions to automate most supply chain tasks from receiving to shipping and returns
  • Transparent and real-time visibility into order, location, item, and shipment management
  • On-request analytics and reporting features through code-free operations
  • API/EDI integrations to transform the workflows into fast and paperless operations.

 

What are the benefits of using 3PL WMS?

  • All-inclusive 3PL performance boost
  • Accurate real-time and on-demand visibility data access
  • Enhanced customer attraction and retention rates
  • Short revenue cycles without losses and manual billing.

 

#4 Fishbowl Inventory

fishbowl-inventory-warehouse-management-system (1)

FishBowl Inventory warehouse management system

 

Fishbowl Inventory is a warehouse management system application designed specifically to bring high automation for inventory and manufacturing workflows.

 

What are the key features of warehouse management system by Fishbowl:

  • Intelligent-driven inventory and order management
  • Enhanced serial and lot tracking
  • Real-time inventory tracking through multiple locations
  • Advanced mobile-first warehouse scanning software to save much time through manual labor automation.

 

What are the benefits of using Fishbowl Inventory?

  • Improved data management and processing
  • Enhanced labor productivity and performance
  • Increased customer retention and satisfaction
  • Streamlined supply chain management workflows.

 

So, how to choose a warehouse management system provider? You should clearly realize current business challenges and goals you want to achieve. Then, accurately analyze each provider’s functionality to select the one that fits your enterprise demands the best.

Key Features of Warehouse Management Systems

Now we want to discuss 5 features of warehouse management systems that are a must-have in 2021 to meet your business needs and requirements.

 

#1 Inventory Management & Tracking

As one of the core components of any market-specific business, warehouse inventory management software is a must.

First, it allows you to automate and streamline inventory management processes. Simply put, you get accurate data-driven insights into your warehouse business and know when and what items you should order, what vendors you’ve worked with, and the latest rates you’ve been charged.

Second, you can leverage the benefits of reducing day-to-day manual operations transforming them into an analog-to-digital automated process. A warehouse inventory management software automatically tracks the incoming and outgoing inventory data which allows to reduce labor costs and increase internal teams’ productivity.

Third, warehouse inventory management software provides you with reduced inventory levels, advanced order fulfillment, and decreased order cycle time.

This way, high inventory data accuracy offers your company to become instantly responding to any customer needs with the knowledge of exact stock data, inventory counts, and timings required to replenish the exact warehouse.

 

Why Inventory Management & Tracking Is a Must-Have

Why Inventory Management & Tracking Is a Must-Have for Your Business

 

#2 Order Fulfillment & Management

Another crucial business component for any market-specific company is order fulfillment. For this reason, warehouse management software with order fulfillment and management features is a must-have in 2021.

Simply put, warehouse fulfillment software fully automates and streamlines the entire inventory management processes from receiving to final product shipping.

 

First, warehouse fulfillment software with order fulfillment and management is important to build smart logistics between multiple warehouses so that it automatically creates routes with the right order-product relationship.

For example, you have a warehouse in North Carolina with specific orders that should be filled up with the products currently available in another warehouse located in Virginia. This way, you can fully minimize the labor expenses previously aimed at logistics elaboration.

 

Second, the way you fulfill and manage orders impacts the final customer satisfaction and sales.

In case you have an e-commerce store with multiple products shipping them all over the United States, you need to ensure a high level of order fulfillment and management to meet the time and quality of delivery.

In terms of sales growth, the features of order fulfillment and management of your business warehouse software are the core and initial growth points to scale your business and expand into new markets.

This becomes possible as the more efficiently and quickly you adjust these processes, the more customers you become able to serve. So, if you want to boost sales and increase the inventory turns, start with using powerful order fulfillment and management features that are provided out-of-the-box within the best warehouse management systems.

 

Why Order Fulfillment & Management is a Must-Have

Why Order Fulfillment & Management is a Must-Have for Your Business

 

#3 Advanced Picking, Replenishment, Shipping Functionality

Picking, packing, replenishing, and shipping are among the most important and yet challenging operations for companies while scaling.

For these reasons, warehouse management systems provide easy-to-use automation tools that help e-commerce and other B2B/B2C businesses scale easily, quickly, and cost-efficiently.

Picking is one of the most labor-intensive operations in any distribution center (DC) even using such methods as a wave, zone, batch, and cluster picking. Thus, warehouse management systems provide advanced picking automation tools that help your business reduce labor costs, increase the efficiency of your warehouse processes, and scale with ease.

Besides, the best warehouse management systems allow to automate and keep control of the replenishment process for your warehouse. Simply put, the software helps inventory managers and planners automate their core operations like inventory ordering, stock data counting, and others.

This way, you can minimize the inventory replenishment fail ratio, decrease labor expenses, and automate lots of processes like moving inventory from reserve storage to primary ones.

Ultimately, it’s an open secret that high-quality and timely shipment is partly a result of well-thought-out picking, packing, replenishing, and other processes. However, your business can greatly benefit from using logistics warehouse management software by getting:

 

  • Enhanced order accuracy rate
  • Efficiency boost
  • Streamlined supply chain
  • Decreased error ratio
  • Cost-effective shipping.

 

Why Picking, Replenishment, Shipping Are a Must-Have

Why Picking, Replenishment, Shipping Are a Must-Have for Your Business

 

#4 Predictive Analytics with Insightful Dashboards & Charts

It is an open secret that deep predictive analytics is a successful progress engine in 2021 as you daily get, process, and return gigabytes of data. This way, the better you analyze, the better results you get within your business.

Let’s now briefly discuss the hot benefits you get by using analytics tools in a warehouse management system.

First, top predictive data analysis algorithms provide a wide range of smart techniques like AI data mining, modeling, statistics, and others that allow you to leverage the receiving data in the best way possible.

So, the best warehouse management systems provide predictive analytics which empowers you to transform the quantity of data into quality. The more qualitative insights you get from analysis, the better your decision-making becomes.

Second, data analysis helps you keep track of your warehouse inventory real-time and analyze the emerging challenges instantly. This way, you can greatly improve the inventory management processes which leads to high customer satisfaction and retention.

Third, predictive analytics tools of a warehouse management systems make it possible to monitor and spot emerging and changing customer habits. This way, you can tune your internal business operations and processes in such a manner that final customers get even shorter delivery times and shipping quality.

Ultimately, top warehouse management software vendors provide data analytics tools that help monitor the newest market trends. This way, you can implement new methodologies and techniques before your market competitors and become a favorable option for customers so that you boost sales and customer satisfaction.

 

Why Predictive Analytics Is a Must-Have in 2021

Why Predictive Analytics Is a Must-Have in 2021

How to Build a Warehouse Management System: Key Steps

#1 Define your goals

Any warehouse management system is designed to meet specific business needs and automate exact operations. For this reason, first, define your current business challenges that should be met by purchasing out-of-the-box solutions or building top warehouse management systems tailored to your one-of-a-kind business model.

Recognition of your business goals will help you choose a relevant warehouse management system software type described earlier. The core point of selecting a proper solution type is that you will pay exactly for what you need avoiding extra functionality that may be not ever used.

After choosing the suitable warehouse management system architecture, you should define the exact pool of features you need to solve specific business challenges.

For example, in case you want to boost warehouse inventory management and tracking processes to achieve highly automated paperless workflows and reduced labor costs, then consider warehouse management system applications that provide all-inclusive inventory management features.

#2 Choose out-of-the-box vs custom warehouse management systems

As we’ve stated above, choosing the types of warehouse management systems depends on your business challenges and lots of other crucial factors that we want to discuss right now.

So, how to choose a warehouse management system: off-the-shelf vs custom warehouse management software.

 

Implementation and setup time

Out-of-the-box top warehouse management software vendors mostly provide a faster and easier setup compared to custom warehouse management systems.

However, as we stated above, Softeon offers ready-made solutions and charges $200,000 to $750,000 as implementation costs. This fact greatly shows that lots of off-the-shelf business warehouse software may become an even more costly solution for your business.

Custom warehouse management system software development is definitely a long process that takes several months before usage, but the pricing depends on the number of features, their complexity, and the required architecture scalability you want to achieve.

 

On-demand functionality

Off-the-shelf warehouse management computer systems most commonly provide a fixed number of features along with those your business may never need. Simply put, you have no choice.

You should also decide if you want to integrate your warehouse software with your CRM, website, and other essential systems.

However, custom warehouse management software development is about building the required architecture and functionality tailored to your one-shot warehouse needs.

What’s more, you can modify the features list during the development process so that they ideally meet your ever-changing business demands.

 

Scalability

Ready-made warehouse management system applications offer limited scalability opportunities for your business.

The chances are high that scaling your business may result in the lack of production capacities and you’ll be forced to change the warehouse management system provider.

Building a warehouse management system, you embed the required level of scalability in terms of the employees’ count, number of warehouses, and other aspects during the development process. This allows you to invest once and use smoothly scale your business along the way.

 

Warehouse management system software cost

Off-the-shelf solutions are mostly much cheaper than custom warehouse management system software at the beginning as you most commonly pay a subscription, setup, adjustments, and training fees to start using the platform.

However, top warehouse management software vendors charge fees for each new user added to the platform once exceeded the plan’s limit. This way, scaling your e-commerce business may result in a costly and thorny way.

Flipside, building a warehouse management system is more expensive than out-of-the-box solutions, but you will save much funds in the long run. As we’ve stated above, you embed the required level of scalability during the data warehouse software development process. It means that you will add as many users as you need free of charge.

When you build your own warehouse management system, you get lots of integration opportunities that you also don’t need to pay for additionally like in case you opt for a ready-made platform.

So, how to choose a warehouse management system? We recommend building a warehouse management system from scratch when you have enough budget to build the whole platform architecture and want to avoid scalability and integration limitations.

 

Ease of integrations

Off-the-shelf warehouse stock software provides a fixed list of integrations available out-of-the-box. In one respect, this becomes a time-saving and easy-to-use option in case a list of integrations is exactly what you need.

On the other hand, only a few off-the-shelf top warehouse management systems offer custom integrations on-demand.

So, in case you have a large e-commerce store with lots of multicomponent business operations, you definitely need to integrate it with multiple platforms to automate your workflow.

In contrast, building a warehouse management system allows you to integrate with hundreds of products by embedding the required API connections during the warehouse management system application development process.

 

The Key Factors While Choosing a Warehouse Software Type

The Key Factors While Choosing a Warehouse Software Type | Ascendix Tech

#3 Choose a development option

In case you want to build warehouse management systems tailored to your specific business needs from scratch instead of , you should define the most relevant development option.

Specifically, there are 3 key development options:

  • Find a CTO/technical partner
  • Hire a team of freelance developers
  • Outsource to a custom software development partner.

 

Each option has its pros and cons, but all of them will help you answer the question ‘how to choose a warehouse management system’ and are worth your attention.

Want to build your own warehouse management system?

At Ascendix, we have solid expertise in building complex and on-demand inventory warehouse management systems. Answer a few simple questions and get a ball-park estimate of warehouse management system software cost.

Final Words

Warehouse management systems gain popularity and importance day by day due to a rapidly growing market and ever-changing customer habits. However, building a high-quality warehouse management system software is a complex and thorny process that requires solid technical background and expertise.

Wondering how to choose a warehouse management system? At Ascendix Tech, we offer warehouse management system development services to help you meet current business challenges through a cutting-edge technology solution.

If you are looking for WMS software providers to discuss your project idea, feel free to check our case studies and contact us. We will be glad to help you build a powerful warehouse management system application that meets your business needs and makes your customers even happier.

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